3i investors to float 33% stake this summer

THE RISK capital provider 3i and its clearing bank shareholders are planning to float a third of the company this summer.

City sources estimate the float could value 3i at between pounds 1bn and pounds 1.5bn, depending on market conditions.

A stock market quote for 3i, set up by the six main clearing banks and the Bank of England to invest in small and medium-sized businesses, was first proposed four years ago and has been officially pulled once. There was scepticism in the City yesterday that the deal would finally go through.

Brian Larcombe, 3i's finance director, insisted the float would happen this time. 'We are as confident as we can be. We have a very clear commitment from the company's shareholders.'

Mr Larcombe said the only reason for calling the deal off again would be a market crash. 'All the evidence of the performance of 3i's own portfolio of small and medium- sized companies is very good. We feel quite confident that earnings growth is going to be delivered.'

He said it was too early to say exactly how the float would be arranged, but that most of the shares would go to UK institutions, with a reasonable chunk for retail investors. 3i's current shareholders - the Bank of England, the four high- street banks, Bank of Scotland and Royal Bank of Scotland - will retain a majority stake.

At 30 September 1993, 3i had total investment assets valued at pounds 2.78bn and total shareholders' funds of pounds 1.63bn after adding back deferred tax of pounds 155.93m.

In the six months to 30 September, 3i's total return after tax to shareholders was pounds 151m.

The company will announce its next set of annual results, for the year to March 1994, before the float.